The Brazilian's low income consumers boom and credit facilities effects in the travel sector

: the case of CVC travel agencies

Abstract

The Brazilian traveling sector has been growing at a fast pace in the last couple of years. Even though there used to be a scarse supply of traveling company services, today the segment suffers fierce competition mainly in the Brazilian’s low income target (Class C, D and E). In order to succeed, both economic growth and credit facilities have to play crucial roles in this sector. In short, the goal of this dissertation is to evaluate how the low income consumers’ boom impacts the traveling market and how companies face this challenge. Therefore, this dissertation aims to (1) assess the added value that low income consumers gain with credit facilities and (2) understand which are the attributes that traveling companies should focus on, regarding consumers’ criteria when choosing to travel (credit facilities, disposal income, social class, etc.). These goals were achieved through a careful review of literature concerning these matters, combined with meetings with Renato Meirelles - Data Popular’s Director, an expert in low income classes in Brazil and the founder of this specialized institute- who provided important data in order to complete the case study. This case wants to illustrate the importance for travelling agencies to be aware and avoid the so called market myopia phenomenon by always predicting both the market and Brazilian’s consumer trends. Also, some government stimulus that boost the Brazilian economy create a potential emerging class – the new middle class – that have a promising enhanced quality of life ahead of them. Despite all the risks involving low-income classes, the default rate associated, numerous companies in a number of different sectors are investing and exploring their consumption potential.

Date of Award	24 Feb 2012
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Adriana Schneider Dallolio (Supervisor)